Business Glossary

sealed bid, containing price and terms, submitted by a prospective underwriter to an issuer, who awards the contract to the bidder with the best price and terms. Many municipalities and virtually all railroads and public utilities use this bid system. Industrial corporations generally prefer negotiated underwriting on stock issues but do sometimes resort to competitive bidding in selecting underwriters for bond issues.

offer to pay an equal price for all shares tendered by a deadline; contrasts with two-tier bid.

negotiable debt obligations of the U.S. government, secured by its full faith and credit and issued at various schedules and maturities. The income from Treasury securities is exempt from state and local, but not federal, taxes.

1. Treasury bills-short-term securities with maturities of one year or less issued at a discount from face value. Auctions of 91-day and 182-day bill take place weekly, and the yields are watched closely in the money markets for signs of interest rate trends. Many floating-rate loans and variable-rate mortgages have interest rates tied to these bills. The Treasury also auctions 52-week bills once every four weeks. At times it also issues very short-term cash management bills, Tax Anticipation Bills, and treasury certificates of indebtedness. Treasury bills are issued in minimum denominations of $10,000, with $5,000 increments above $10,000 (except for cash management bills, which are sold in minimum $10 million blocks). individual investors who do not submit a competitive bid are sold bills at the average price of the winning competitive bids. Treasury bills are the primary instrument used by the Federal Reserve in its regulation of money supply through open market operations. See also dutch auction-repurchase agreement.
2. Treasury bonds-long-term debt instruments with maturities of 10 years or longer issued in minimum denominations of $1,000.
3. Treasury notes-intermediate securities with maturities of 1 to 10 years. Denominations range from $1,000 to $1 million or more. The notes are sold by cash subscription, in exchange for outstanding or maturing government issues, or at auction.

(www.ebay.com) an online auction house established in 1995 and headquartered in San Jose, California. By acting as an auctioneer, eBay enables individuals to buy and sell almost anything through theWorld WideWeb.

An online auction has several advantages over a conventional one. Bids on an item can be collected for several days, typically a week, rather than having to be delivered all at once. Perhaps more importantly, the actual bidding can be done by computer.Would-be buyers specify their maximum bids, but the computer places actual bids that are just high enough to outbid the other bidders. Finally, the computer can search quickly through thousands of item descriptions.

a secret minimum bid in an auction. Ordinarily, the minimum bid (the lowest price that the seller will take) is announced to would-be buyers. However, auction services such as eBay allow the seller to specify a secret minimum bid, called a reserve price. The amount of the reserve price is not disclosed, but bids below it do not result in a sale.

a sale in which buyers make bids (offers) and the highest offer is accepted. For information about online auctions see eBay.